July 14, 1966

HEALTH AND WELFARE


Second report of standing committee on health and welfare-Mr. Harley. [Note: Text of foregoing report appears in today's Votes and Proceedings.1


OLD AGE SECURITY

ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME

LIB

Allan Joseph MacEachen (Minister of National Health and Welfare; Minister of Amateur Sport)

Liberal

Hon. A. J. MacEachen (Minister of National Health and Welfare):

Mr. Speaker, earlier, in the house, I indicated the government's intention to provide a further program of income support for older persons in Canada. I promised members I would give the house a general outline of this program before we adjourned for the summer. I am pleased to carry out that commitment, but before I do there are a number of comments I would like to make.

First, I believe the action taken earlier by this house in approving the Canada Assistance Plan will be of real assistance to many older people. Also medicare, when it comes into effect, will bring substantial benefits; indeed, it will be of special importance to older people, just as hospital insurance has been.

I would also remind the house that since this government took office the flat rate pension has been increased from $65 a month to $75. Some 100,000 persons have been brought under the old age security program this year through lowering of the eligibility age to 69 and in January of next year, when the eligibility age will be dropped to 68, another 100,000 will receive full benefits. This yearly reduction in the eligibility age will continue until 1970 when all persons 65 and over will be entitled to the flat rate pension.

By this time, 1970, the flat rate pension will be available as a matter of right to some one and a half million persons age 65 and over. Also, of course, a steadily increasing level of retirement benefits will be payable under the Canada Pension Plan, commencing next January. The Canada Pension Plan, we feel,

will largely solve the problem of basic retirement pensions when its provisions come fully into effect and pensions are payable at the full scales provided in it. The plan in itself is a generous one.

There are, however, many older people in Canada who cannot benefit fully, or at all, from the Canada Pension Plan, because they are already past the retirement age or because they will be retiring before the plan becomes fully operational. I do not have to remind the house that the position of this particular group has been of considerable concern to this parliament and to this government.

[DOT] (2:40 p.m.)

I would also note the recommendation of the joint committee on the Canada Pension Plan urging further measures on behalf of those people who, because they are or soon will be retired, will not be substantial contributors to or beneficiaries from the Canada Pension Plan.

The increase in the monthly flat rate pension and the lowering of the eligibility age are in line with this recommendation, but clearly this is not all that is needed. I can assure the house that the government, and more particularly my department, has for some time been exploring various additional ways through which adequate assistance can be provided for this group of people. I would recall, for example, a speech which I gave on March 2 in Regina in which this problem was discussed. At that time I noted that a considerable number of older persons would not be able to take advantage of the Canada Pension Plan. I went on to discuss some of the various approaches which were being considered to meet this problem.

It is apparent, then, that a further program of benefits should be considered for persons in this particular age group. We propose to introduce a program that will guarantee a minimum monthly income of $105 to old age security recipients.

The details of such an income guarantee program are now being considered. The total payments which will be required under this program will, of course, decrease over the years, as the Canada and Quebec pension plans come into effect and pay increasing benefits.

July 14, 1966

7652 COMMONS

Old Age Security Income Announced

The program is being provided with these two plans in mind and is specifically designed for those people who are not and will not, because of age, be able to take advantage of the contributory pension plans. This, as I said, is in line with the recommendations of the special joint committee. Because it is an income guarantee program, and because of the increasing benefits that will be available under the Canada and Quebec pension plans, the burden on the federal treasury will be almost entirely a transitional one.

By using the contemporary income guarantee formula rather than the flat rate increase it is felt that income support can be provided at a higher level for a given outlay of funds. Through this income guarantee program the needs of the older citizen can be more adequately met in a way that is financially responsible and least burdensome on the treasury.

I can inform the house that such a program will be presented to parliament for approval in the autumn, after parliament has reconvened.

It is estimated that the annual cost to the treasury of such a program will be in the neighbourhood of $225 million at the beginning. The revenue measures that will be needed to meet the burden which these supplementary benefits will place on our national finances are also being considered.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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PC

Philip Bernard Rynard

Progressive Conservative

Mr. P. B. Rynard (Simcoe East):

Mr. Speaker, we have listened to the long awaited announcement just made by the minister with some trepidation and disappointment. While it is true the minister says this legislation will be coming before us in the fall for approval, we had hoped to deal with it now.

I should like the minister to explain whether this supplementary benefit will be based on a means test, which is not acceptable, because his statement was not clear in this regard. This announcement comes after a great deal of urging by the party on this side of the house to which I belong.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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?

An hon. Member:

And the Liberal backbenchers.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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PC

Philip Bernard Rynard

Progressive Conservative

Mr. Rynard:

And as someone has said, there has been some urging on the part of a Liberal backbencher. The government has finally seen the light. It is pleasing to note that we in this party have fought constantly for a pension increase and we are happy that we have succeeded at least to the point of having an announcement, even though the actual increase is still to be delayed.

[Mr. MacEachen.)

This program will bring a measure of contentment and happiness to our older citizens, and in a great many cases it will provide many of the necessities they need so badly when the program comes into effect. As the party which brought this question to a vote early in the session, we are pleased at the result to a point, and are most happy at the measure of justice we hope it will bring to our senior citizens. However, Mr. Speaker, I would ask the minister whether the increase could not be made effective as of now, to help combat the high cost of living.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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NDP

Stanley Howard Knowles (N.D.P. House Leader; Whip of the N.D.P.)

New Democratic Party

Mr. Stanley Knowles (Winnipeg North Centre):

Mr. Speaker, any announcement

that indicates that there is to be an improvement in the income of our old age pensioners should be greeted with approval in this House of Commons. However, I must say that the statement the Minister of National Health and Welfare has at long last made to parliament is bitterly disappointing. In the first place, if there is anything in this program that has any value, that offers any help to our senior citizens, it should be put into effect right away.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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?

Some hon. Members:

Hear, hear.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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NDP

Stanley Howard Knowles (N.D.P. House Leader; Whip of the N.D.P.)

New Democratic Party

Mr. Knowles:

It is not good enough to tell the older people of this country that approval will be given in the fall to a measure the effective date of which has not been indicated to us in the statement given by the minister. The crux of this proposal is that there will be made available to our senior citizens an additional amount of money on a different basis from that on which they receive the present $75 a month. The minister uses the phrase "guaranteed annual income". He indicates in his statement that the details are yet to be worked out, but it is clear from such details as he has given us that the plan includes a means test under another name. All the government is proposing is that old age pensioners who do not have $30 a month of other income can qualify for up to $30 a month under this supplementary provision. That is a means test.

The proposed increase will be fine, if you forget the quality of dignity, for those who have nothing else. But there are thousands of older people in this country who, because there has been no means test in respect of the old age pension, have saved a little money and have incomes all told of $105, $110, or $150 a month. These people today are in desperate circumstances. In this legislation there is nothing for them at all. That is why I

July 14, 1966

say that this long awaited announcement, with all the fanfare we have had about it and the pulling of teeth it has taken to get it, is bitterly disappointing.

The minister does not make clear just where Canada Pension Plan benefits fit into this scheme, but I think one can see where they fit. They are to be part of the other income that comes under this means test that the minister calls a guaranteed annual income. The whole concept of the Canada Pension Plan was to provide additional income, and now it is income that is to be taken into account under a glorified means test. The minister makes it clear that this proposal is to be transitional in character. He says the burden on the treasury will diminish as the years go on and the Canada Pension Plan comes into full force. In other words-let us get this clear-this is not an increase in the old age security pension, which is what the people of this country want at this time.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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?

Some hon. Members:

Oh, oh.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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NDP

Stanley Howard Knowles (N.D.P. House Leader; Whip of the N.D.P.)

New Democratic Party

Mr. Knowles:

My friends across the way can groan, but they will really groan when they get back to their constituencies and meet their people when they have learned that this government has tried to fob them off with a supplementary payment which is on a means test basis.

[DOT] (2:50 p.m.)

Mr. Speaker, the parliament of Canada

took one of the greatest steps in its history when it said that retirement income is a matter of right. We did that in 1951 when we removed the means test from the old age pension. To put it back on any portion of what our senior citizens are to receive is a retrograde step, and I hope that between now and the fall when we come back to deal with this legislation the government will repent of this decision and will announce a decision which the people of Canada want. The government will hear about the reaction of the country to this proposal from the hundreds of thousands of people who will not benefit from this measure at all, and I urge the government to reconsider its whole position.

The Minister of National Health and Welfare has let the cat out of the bag by giving us the figure representing what he thinks this plan will cost in the first year. The Minister of National Health and Welfare says that at the beginning it will cost $225 million a year. Since I heard that figure I have not had time to do my arithmetic in

7653

Old Age Security Income Announced precise detail, but I have been able to compute that at best this will amount to an average of $15 a month for the people on our old age pension rolls during the first year.

The government says it is offering a total of $105 a month, which represents a supplement of $30 a month; but on an average, according to the terms of this proposal, it only comes to $15 a month or perhaps even less.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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?

An hon. Member:

It is only $11.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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NDP

Stanley Howard Knowles (N.D.P. House Leader; Whip of the N.D.P.)

New Democratic Party

Mr. Knowles:

Some of my friends have had more time to do their arithmetic than I, and they are saying it is only about $11 a month. This means, Mr. Speaker, that because some people will get the full amount, many if not most of our old age pensioners will not get any at all.

Therefore, Mr. Speaker, although, as I said in the beginning, one would expect that any announcement which does anything for our old age pensioners should be welcomed, this statement is bitterly disappointing. It is not satisfactory from a financial point of view and, what is even worse, it takes away from our senior citizens something that we gave them in 1951-their dignity, and their entitlement to their old age pension as a right. I deeply regret that a government which calls itself Liberal has announced that it intends to come in with such legislation.

The matter of old age pensions, Mr. Speaker, could be dealt with in a direct, straightforward and honest way, and I call upon the government to reconsider its decision. At the end of March, 1966, there was a surplus of $216,982,834.44 in the old age security fund, even after some of the money in that fund had been transferred to another fund. According to an answer given to a question placed on the order paper by the hon. member for Grey-Bruce (Mr. Winkler), the Department of Finance estimated that at the end of the fiscal year in which we now find ourselves, the total surplus in that fund will be $455 million.

In other words, even though we are lowering the eligible age and putting more pensioners on the roll, the surplus in this fiscal year will be greater than the surplus in the last fiscal year. This is money which comes from three taxes, 4 per cent on personal income up to a ceiling, a 3 per cent sales tax and a 3 per cent corporation tax, which were earmarked for the old age security fund by a decision of parliament. The old age security fund is on a pay as you go basis. The money

July 14, 1966

7654 COMMONS

Old Age Security Income Announced which is collected from the taxes paid by the people of Canada and which is being put into the old age security fund is for the payment of old age security pensions, and therefore I say it is a violation of the spirit of that act for the government to leave that money in the fund and not give it to the people for whom it has been collected.

There are over a million pensioners in Canada today. Perhaps there will be 1,200,000 by the time the 68 year olds get on the roll in 1967. I suggest, Mr. Speaker, that this year every pensioner on the roll could be paid the extra $25 a month that we urged they should receive, could be paid this sum retroactively to the beginning of the fiscal year, could receive the full $300 increase out of the old age security fund, and there would still remain in that fund at the end of the year a surplus of more than $100 million.

It is a disgrace, Mr. Speaker, for the government to come in with the statement that has been made today, in view of the money which is lying in the old age security fund. This money was collected for the old age security pension, collected on a pay as you go basis, but the government has refused to use it. I say that this statement today is bitterly disappointing to us in this house, and it will be received with great disappointment throughout the country as a whole because the people realize that not only is there a need for extra money on which to live, but there is a need for-

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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LIB

Lucien Lamoureux (Speaker of the House of Commons)

Liberal

Mr. Speaker:

Order, please. The hon. member knows the rule with respect to comments made at this time. The rules states that brief comments can be made by members of the parties in opposition.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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NDP

Stanley Howard Knowles (N.D.P. House Leader; Whip of the N.D.P.)

New Democratic Party

Mr. Knowles:

Thank you, Mr. Speaker, for reminding me of the rules. I am very familiar with them. I had something to do with the drafting of the rule to which you are referring.

I submit that the minister has made a lengthy, argumentive statement, and that the government itself has delayed this announcement until what could be the last day of the session before we recess. The minister promised this statement on the second reading of the Canada Assistance Plan, and promised it on several other occasions. There will be no other opportunity, unless the session continues, to speak on this matter. I think it is appropriate that one spokesman from each party should be allowed to comment on this statement.

However, I have almost completed what I wanted to say. Today even the pension of $100 for which we have asked is not enough.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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?

Some hon. Members:

Oh, oh.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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NDP

Stanley Howard Knowles (N.D.P. House Leader; Whip of the N.D.P.)

New Democratic Party

Mr. Knowles:

My hon. friends can laugh, just as they did when a pension of $50 was suggested some years ago.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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LIB

Lucien Lamoureux (Speaker of the House of Commons)

Liberal

Mr. Speaker:

Order, please. As the hon. member for Winnipeg North Centre has pointed out, he is familiar with the rule to which I have referred because he has had something to do with having it drafted. However, the rule does not provide for an exception, even in the case of a debate such as this. I should like him to keep that in mind and perhaps bring his remarks to a conclusion soon.

Topic:   OLD AGE SECURITY
Subtopic:   ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME
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July 14, 1966